ECB announces seventh interest rate reduction in a year, also reducing savings

This article was last updated on April 17, 2025

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ECB announces seventh interest rate reduction in a year, also reducing savings

The European Central Bank (ECB) again reduces interest in the eurozone by a quarter of a percentage point. The ECB wants to support the economy more. It has been the seventh interest rate reduction since June last year, which ends at 2.25 percent.

In 2023, the ECB quickly raised interest rates to a record of 4 percent. That was to do something about the then high inflation due to the increased energy prices. With high interest rates, money becomes more expensive, which is slowing down the economy. The idea must fall with that. A lower interest rate has the opposite effect. Because borrowing money becomes cheaper, it supports the economy.

For savers, the series of interest rates means bad news. They park savings that banks cannot convert into loans every night at the ECB in Frankfurt. They still get that interest of 2.25 percent about that. In the past year and a half years, ING and ABN AMRO will pay an interest of 1.5 percent on a freely absorbable savings account, Rabobank 1.7 percent.

ING is the first of the three large banks that will lower interest. Tomorrow it will drop to 1.25 percent. Price fighters, especially foreign banks, offer higher savings rates. But those also fall due to the falling interest rate at the ECB. The expectation of economists is that the ECB will implement even more interest rates in the near future.